Farmers and growers have been given much-needed certainty in the short-term after the Treasury today (15 August) pledged to replace European Union funding for farmers post-Brexit.
Chancellor Philip Hammond has guaranteed that the current level of funding under Common Agricultural Policy (CAP) Pillar 1 will be maintained until 2020, as part of the transition to new domestic funding arrangements. This means that farmers can continue to count on payments under the Basic Payment Scheme.
Agri-envrionment schemes agreed before the Autumn Statement will also be guaranteed funding through to their conclusion – even if they continue beyond the UK’s departure from the EU.
And existing rural development grants such as Leader, which aim to increase farm productivity and support farm diversification, will be honoured.
Environment minister Andrea Leadsom reacted to the chancellor’s announcement by saying: “This guarantee of funding is excellent news for our farmers and our environment.
“I’m delighted we can provide this crucial certainty and continuity to our rural communities while we develop a new approach to supporting agriculture and protecting our precious countryside.”
Under CAP, UK farmers are estimated to receive around £3 billion a year in subsidies, with the biggest farms getting grants of £1 million.
NFU president Meurig Raymond said he is "extremely pleased" that funding will be continued following the body's discussions with Leadsom, Defra and the Treasury in the past three weeks.
“The Treasury’s announcement today is positive for farmers,” he said. “I hope that this short-term certainty will help to deliver longer-term confidence and this is exactly what farm businesses need now.”
“We’ve been emphasising to the government at all levels that the success of the UK’s largest manufacturing sector, food and drink, – worth £108 billion to the UK economy – is underpinned by the farming sector.”
As well as farmers, universities and other businesses have also been given funding guarantees. The Treasury has agreed to underwrite payments granted under the EU’s €80bn (£69bn) Horizon 2020 scheme, even when specific projects continue beyond the UK’s departure from the EU. The programme awards funding for research and innovation.